Difference between revisions of "Economics Homework Two Answers - Student Twenty-Three"

Revision as of 17:05, June 19, 2010

JonathanL

1) quantity; price

2) Let Q= Quantity and P=Price. Since both equations are already solved for P, we can insert (6+Q) in for P in P=30-Q. By simplifying we get 2Q=24, or Q=12. We then substitute Q=12 in for Q in either of the original equations. Again simplifying, our answer come out to P= 18. Reinserting units our final answer is P= 18$, while Q=12.

3.) When the supply of a good or service increases, the market price drops due to increased competition. Conversely, when the demand for a good or service increases, prices increase because the market can sustain by selling goods at such inflated prices. Usually, a demand for a good is the first step in this process, followed by the increase in prices. This is followed by many new businesses springing up in that particular industry, which leads to competition among businesses, which naturally causes the price to drop, assuming this is a free market. In management we would call a successful industry that is growing quickly a rising star, and an industry that is growing slowly but is very profitable a cash cow. Once you obtain a cash cow, the thinking is to invest in a rising star, as to make your business more profitable in the future.

4.) What the supply and demand curve does not take into account is time. We know that the fruit will only stay ripe for so long; therefore our window to sell the fruit is limited. Now, because we have a surplus of ripened fruit, and we know generally how much fruit we can sell at a given price in a given amount of time, we know that if we do not lower the price, we will waste product. So rather than being stubborn and not lowering the price, it makes far more sense to cut your losses and reduce the price of the goods so a greater quantity can be sold, even if it means lowering the price.

5.) A. The Yankees built 600 “obstructed view” bleacher seats, because that is where the supply and demand price intersect. The Yankees make 3000$ per game from these seats, which is not much, but the amount that they make from the luxury boxes that obstruct these seats far outweighs the money lost for those 600 seats.

     B.  If the City of New York passed a law limiting the price of “obstructed view” tickets to 2$, we can see from the supply and demand statistics that they would be sold out extremely quickly, which would cause a shortage and lead to a long waiting line.  I strongly feel that government should have no say in what you charge for your private business, that would be like saying you cannot charge anymore than 2$ for a carwash, or something similar to that.  However, if the Yankees for whatever reason felt compelled to do this on their own, then more power to them.

6.) The free market is much more powerful than the wealthiest people in the world because the opinion of one is nothing compared to the opinion of many. Similarly, Michael Phelps, the greatest swimmer of all time, is no match to the free moving ocean. No matter which direction he feels like swimming in, if the ocean chooses to drag him a particular way, he will be far outmatched and his individual strength will be meaningless.

7.) Don’t even get me started on health care and these fools that think socialized medicine is a good idea. What 99.99% of these idiots don’t understand is that regardless of how low the price seems, it still costs just as much… sure it may cost 200$ to get a basic MRI in a country like Canada or England, opposed to the 800$ it will cost in the United States, but #1 you will have to wait 10x longer to get it done, and #2 that extra 600$ that you think you are saving is just paid for by taxes. So naturally waiting lists develop because everyone thinks it is so inexpensive to get treatment, when it is really not cheaper at all, perhaps even more expensive than in a free market! What people also fail to mention is this: you cannot put a price on human life. It is really sick if you think about these socialist countries and their medical philosophies. They are not worried about the care that their patients receive, rather they are trying to be more cost efficient, which is something that you do not generally do when human life is at stake.